INDUSTRIAL BANK(SH:601166)2024-04-26 05:32Investment Rating - The report maintains a "Buy" rating for the company, reiterating the positive outlook based on the company's performance and future growth potential [3][6] Core Views - The company's revenue growth turned positive in 1Q24, exceeding expectations, driven by better-than-expected interest income and non-interest income [4] - The company's loan growth slowed as expected, but corporate lending performed well in terms of both volume and pricing, with a new loan average interest rate of 4.1% [4] - The company's asset quality remained stable, with a non-performing loan (NPL) ratio of 1.07% and a provision coverage ratio of 245.5% in 1Q24 [6] - The company's deposit cost decreased by 12bps to 2.12% in 1Q24, contributing to a stable net interest margin (NIM) of 1.87% [4] Financial Performance - In 1Q24, the company reported a revenue of RMB 57.751 billion, a 4.2% year-over-year (YoY) increase, and a net profit attributable to shareholders of RMB 24.336 billion, a 3.1% YoY decline [3] - The company's net interest income grew by 5.1% YoY in 1Q24, contributing 3.3 percentage points to revenue growth, while non-interest income increased by 2.7% YoY, contributing 1 percentage point [4] - The company's return on equity (ROE) for 1Q24 was 3.4%, with an expected ROE of 9.9% for 2024E [3] Loan and Deposit Structure - In 1Q24, the company's total loans increased by 1.6% quarter-over-quarter (QoQ) to RMB 5.547 trillion, while total deposits decreased by 0.6% QoQ to RMB 5.104 trillion [12] - Corporate loans accounted for 61.0% of total loans in 1Q24, up from 58.0% in 4Q23, while retail loans decreased to 35.1% of total loans [8] - The company's loan-to-deposit ratio (LDR) increased to 108.69% in 1Q24, up from 106.30% in 4Q23 [12] Asset Quality and Risk Management - The company's NPL ratio remained stable at 1.07% in 1Q24, with a provision coverage ratio of 245.5%, up 0.3 percentage points from the previous quarter [6] - The company's credit cost in 1Q24 was 0.32%, a decrease of 7bps from the previous quarter, reflecting proactive risk management and increased provisioning [12] Future Outlook - The company is expected to achieve a net profit attributable to shareholders of RMB 77.320 billion in 2024E, with a YoY growth rate of 0.3%, and RMB 86.609 billion in 2026E, with a YoY growth rate of 7.3% [3] - The company's net interest margin (NIM) is expected to stabilize, with a projected NIM of 1.59% for 2024E and 1.50% for 2026E [13] - The company's loan growth is expected to remain strong, with total loans projected to reach RMB 7.072 trillion by 2026E, a 9.0% annual growth rate [13]